Analyst raises forecast for foundry rivals TSMC, UMC
Silicon Strategies
09/29/2003, 7:50 PM ET
PORTLAND -- A surge in wireless has prompted a research firm to raise its forecasts for both Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and United Microelectronics Corp. (UMC) in the third and fourth quarters of 2003.
The outlook appears to be somewhat brighter for silicon foundry giant TSMC, as compared to rival provider UMC, according to a report from investment banking firm Pacific Crest Securities Inc. in Portland today (Sept. 29, 2003).
"We are raising our 2H03 estimates to reflect an improved revenue and gross-margin outlook for TSMC," wrote Michael McConnell, an analyst with Pacific Crest Securities, in the report.
"We believe TSMC's baseband chipset customer forecasts remain strong for the remainder of the year, with wireline and consumer customers indicating more moderate growth, and PC customers flat," McConnell said. "Nvida's decision to manufacturer its NV36 graphics processor at IBM is one reason for the flat PC outlook at TSMC."
TSMC is also seeing its fab-utilization rate exceed 90 percent, while its 130-nm yields are over 70 percent for most customer designs, he said.
The foundry giant was originally expected to earn $0.10 a share on sales of $1.54 billion in Q3. Now, the company is expected to earn $0.11 a share on sales of $1.583 billion in the quarter, according to Pacific Crest Securities. In the second quarter of 2003, the company earned $0.08 on sales of $1.437 billion.
While TSMC has firm bookings for only one-third of Q4, the company's sales are expected to jump 3 percent in that period over Q3. TSMC was originally expected to earn $0.11 on sales of $1.619 billion in Q4. Now, it is expected to earn $0.12 on sales of $1.634 billion in the quarter, according to Pacific Crest Securities.
Like TSMC, UMC is also seeing strong demand from its wireless foundry customers. As a result, UMC's sales are expected to decline by a more moderate 2 percent in Q3, according to the report.
UMC was originally expected to earn $0.02 a share on sales of $599.5 million in Q3. Now, the company is expected to earn $0.02 a share on sales of $614 million in the quarter, according to Pacific Crest Securities. In the second quarter of 2003, the company earned $0.03 on sales of $627.2 million.
In Q4, the company is expected to see a 6 percent jump in sales, thanks to orders from consumer chip maker Mediatek. UMC was originally expected to earn $0.03 a share on sales of $628.4 million in Q4. Now, the company is expected to earn $0.03 a share on sales of $650.1 million in the quarter, according to Pacific Crest Securities. |
